Innova Market Insights’ trend analysts enjoy segmenting consumers by generation and looking for differences in attitude and behavior. Although we may not recognize differences in generational consumer priorities and purchasing patterns on a day-to-day basis, the process of grouping consumers into age cohorts reveals the impact of various behavior factors in the macro environment. Furthermore, manufacturers, marketers, and trends watchers—like our company—are eager to study Generation Z, the newest generation entering adulthood. In the end, the goal is to more effectively position products and messages to this youngest group of adults.
Each year, Innova releases its Top Ten Trends that capture the essence of consumer behavior for the coming 12 months. Our number three trend for 2023 is “Generational Push,” and it’s here that we acknowledge the emerging voice of Gen Z. These younger consumers are accustomed to sharing their views widely and willingly. Moreover, they expect companies to listen to their opinions when developing products, flavors, and strategies.
Gen Z consumers are trend creators who define what markets should be provide. They welcome positive engagement with companies and seek new experiences. Our research finds that one-third of Gen Z consumers globally say that they “share concerns on social media platforms to create awareness” if they do not find a product that matches their values. They also believe that the food and beverage industry is accountable for taking action and standing up for shared values and beliefs.
Influenced by Education, Epidemics, Economy
The Generation Z consumer is relatively young. The Pew Research Group describes this group as having been born between about 1996 and 2006. That means today’s Generation Z includes those in their late teens and early to mid-twenties and it is a smaller cohort than the Millennials.
Because a high proportion of Gen Z is in school or early career, most of these young adults are not yet part of a new household and have not yet started a family. Their childhood was shaped by several disruptive factors—including the financial crash of 2007 and its economic aftermath, changes in the job marketplace, and, most recently, the COVID-19 pandemic. Uncertainty and instability have been constant companions.
The financial and emotional health of Gen Z was the primary focus of a late 2022 Innova Market Insights Briefing Series report, “Generation Z: Who are They and Do They Have Spending Power?” The report recognizes that this generation faces strong economic headwinds in the form of both tough economic times globally and increasing debt for education. Compounding their weaker financial status is a generational trend toward staying out of the workforce in the teen years and therefore not earning spending money for independent purchases.
Overall, Gen Z attitudes toward food tend to be driven more by cost than by cause. Therefore, financial challenges faced by Gen Z consumers may diminish their importance as the lead generation for future business strategies, at least for the near future. Furthermore, the COVID-19 experience means many Gen Z consumers experienced disruptions in education, social development, relationships, and employment—and now face great uncertainty along with higher overall stress.
Admittedly, Generation Z is experiencing major culture shifts. The last several years have been marked by the impact of parallel shocks of COVID-19 and the economic downturn. Today’s media operates 24/7 and lines have blurred between fact-based and perception-based news and information. Generation Z may not know whom to believe.
The Voice of Gen Z
Every year Innova Market Insights conducts several large surveys and asks consumers about their attitudes and behaviors. We segment their responses across several factors, including age and generation.
Our Innova Trends Survey 2023, conducted in preparation for the development and release of this year’s top 10 trends, asked consumers about factors that should drive new product development. While health benefits and affordability are key drivers across all ages, Gen Z named flavor as its number two most desired product aspect. This suggests that novel flavors may win the hearts of this young and experimental audience. In the same survey, we learned that Gen Z prioritizes physical activity and well-being, along with an active mind and positive mindset.
Data from our 2022 surveys provide additional insights regarding Gen Z. As in 2023, the Innova Market Insights Health and Nutrition Survey 2022 showed that physical and mental performance, as well as physical appearance, are priorities. Gen Z consumers also desired and reported purchasing foods and beverages with immunity boosting properties, especially during the late and post-COVID years. In fact, Generation Z consumers, along with Millennials, have the highest purchased rate of immunity boosting and gut health food and beverages. Natural and high protein healthy snack claims also are most important. Plant-based alternatives are highly appealing to younger generations, who also may be most willing to trade certain product features for environmental or social reasons that are consistent with their values. But, of course, price and affordability are key considerations.
In 2021, Innova Market Insights conducted a consumer attitudes and behaviors survey in regard to flavors. In the end, we noticed some key features of Gen Z consumers. Nearly three-quarters expressed a desire to try new flavors and half look for new flavors when shopping. They seek sensory excitement and mood-enhancing flavors.
This may be a reaction to daily and long-term stresses. Looking a little more deeply, Generation Z likes to indulge with brown flavors and spices, including exotic, world flavors and cuisines. This opens the door to manufacturers looking to expand product lines with product inspirations from Africa and Asia. “Build-your-own” kits and ingredients also appeal to this generation, which is not confident in its scratch cooking skills.
Gen Z consumers over-index on plant-based and fermented food categories. This suggests that innovators could consider finished products incorporating the unique flavors of plant-based and fermented ingredients in conjunction with interesting flavor trends.
Our survey data show that Gen Z consumers in the US are similar to those globally. They expect the brands they use to have values consistent with theirs when it comes to issues of the environment and social responsibility. Staying physically active is most important, along with social connections, appearance, and sports performance. Younger generations are more likely than their elders to pursue healthy aging through alternative therapies, mindfulness and a personal care regimen.
Generation Z consumers choose products, including natural products, that positively boost health and nutrition. They also seek foods and beverages that help build muscle tone or improve sports performance and recovery. Compared to older generations, Gen Z consumers tend to consume less alcohol and avoid dairy, gluten, eggs, and animal proteins.
Gen Z Important—Despite Challenges
The Innova Market Insights Briefing Series report on Generation Z includes several case studies of manufacturers with campaigns and products positioned for the Gen Z consumer.
PepsiCo recognizes the strong influence of social media on Generation Z and the need for manufacturers to reach these consumers through social media and digital tools that enable consumers to purchase products on demand. The company recently released a new lemon-lime soft drink, Starry, that highlights Gen Z priorities, as a “purpose-driven brand built for Generation Z” and a “fun escape” that also takes “steps on sustainability.”
Mondelēz International has noted the popularity of anytime snacking among Gen Z consumers. This includes their interest in snacking to relieve anxiety and boredom.
This youngest generation is important to marketers. However, Generation Z is smaller in number, poorer and more uncertain than Millennials, Gen X, and Boomers. Attitudes to food, eating out, and spending changed as a result of COVID-19 and its aftermath. The anticipated recession in 2023 adds more layers of pressure and complexity.
It will be important for manufacturers to reposition products according to product features as well as the chosen marketing platforms that appeal to Gen Z consumers. As the industry gains a better understanding of this generation—as well as the impact of today’s stressors on short-term and long-term purchasing behavior—processors can modify product lines, pricing, and promotional strategies to match Gen Z expectations.
Generation Z consumers are important not because they are trailblazers, deeply committed revolutionaries, risk-taking entrepreneurs or any of the other youth stereotypes that have been attached to this generation. Instead, it’s primarily because their world changed dramatically when the greater world stopped in 2020 and 2021 for the COVID-19 pandemic. As we continue to learn about the lasting impact of this global event, the new world promises to be very different.
Lu Ann Williams is Global Insights Director at Innova Market Insights, provider of market research services including the Innova Database. With more than 25 years’ experience in the food industry, Lu Ann is a trend expert and frequent public speaker at events worldwide. She leads a team of analysts and works with global clients. Contact her at firstname.lastname@example.org.